Credit card debt and credit card use has been on the rise in recent years. After so many years, consumers are still at a disadvantage when dealing with card companies, mainly due to laws favoring the companies. Most consumers arent aware of their rights, as well as the tricks to deal with the creditors. Discover a few tricks of the trade to steer clear of paying excess credit card fees and make the card companies work for you.
Pay off your Credit Cards
It is advisable to pay off the entire credit debt at the end of the month. This is the best strategy to have one up on the credit card cartel. The first 30 day is an interest rate free grace period which allows you to use their money without paying them anything.
Paying off your cards entirely can save thousands in future continued interest rate payments. Actually, when you pay off your balance you gain the upper hand on card companies because you get a free ride, a 0% short-term personal loan.
This is not a good deal for the card issuer; they are in business for profit. The creditors want consumers to carry their balances month-to-month because they make money on the interest and fees. Credit card issuers dislike free riders or leeches,” people who pay their balances in full regularly. For issuers, their best customers are the ones who carry over balances while paying on time.
Close the Revolving Door
Revolving credit debt is avoidable. The revolvers on average pay high amounts of accumulated interest and fees. Essentially, the revolvers subsidize the activities of the free riders; the free riders pay nothing in fees and interest.
Approximately, 60 percent of credit card users carry over their balances. Carrying a balance is of long-term detriment to you and a boon for card issuers. The high interest rates and their compounding effects work against you.
Avoid Minimum Payments
Dont fall into the trap of the minimum payments laid out by credit card companies. They are not trying to accommodate your finances but in reality exposing you to financial insecurity, a debt trap. Depending on the credit balance it can take years to pay off your debt.
If you make minimum payments, you will be saddled with double digit interest rates. Basically you are paying down interest not the original balance. Dont Sign the Check
Avoid signing the blank checks sent to you in the mail. These checks dont offer a grace period and your high interest starts the minute the checks are used. Just shred the checks as soon as you receive them.
Get the Free Ride
By using these tips, you can keep you finances straight, if not, you might need the help of debt consolidation, credit counseling, or credit consolidation services. Get smart and save bundles of money by following the above tips.